Ontario Tax Exemption for Commercialization (OTEC) 

Overview

OTEC is aimed at supporting innovation in Ontario’s economy by encouraging the commercialization of intellectual property which has been developed by qualifying Canadian universities or colleges. OTEC applies to newly established corporations in priority areas, offering a refund of corporate income tax and corporate minimum tax paid for a qualifying corporation’s first ten taxation years.

OTEC Objectives:

• To support innovation by encouraging business start-ups that commercialize eligible intellectual property
• To encourage new entrepreneurs to develop and transfer to the marketplace research taking place in qualifying institutes
• To foster economic growth in priority areas such as advanced health, bioeconomy (including clean energy technologies), telecommunications, computer, and digital media technologies.

Eligibility Checklist:

Please see the OTEC Program Information Guide for details of eligibility criteria, including definitions of qualifying corporation, eligible commercialization business, and eligible intellectual property, etc. as relevant to OTEC.

	Your company was incorporated in Canada after March 24, 2008 and before March 25, 2012, and was not formed as a result of an amalgamation or merger of two or more corporations.>
	Your company derived substantially all of its revenue from one or more of the following industries during the taxation year: advanced health technology, bioeconomy, or telecommunications, computer, or digital technologies production.
	Your company’s sole activity was: the commercialization and sale of property that incorporates eligible intellectual property as an essential element, or the licensing of computer programs that are eligible intellectual property.
	The eligible intellectual property commercialized by your company was: a patent issued or a patent pending application made under the Patent Act (Canada), or copyright in a computer program that constitutes a technological advancement.
	The eligible intellectual property commercialized by your company was developed during the course of employment or academic study at a qualifying institute.
	The eligible intellectual property commercialized by your company was disclosed to the qualifying institute in a timely manner and in accordance with the qualifying institute’s disclosure policies.
	The eligible intellectual property commercialized by your company was owned, legally or beneficially only by: the qualifying institute where it was developed, the students or employees of the qualifying institute who developed it, or your company.

How to Apply:

The OTEC is a continuous flow program. 

The Ministry of Research and Innovation is committed to making timely decisions on all full applications once submitted.

Preliminary Determination: prior to submitting an application under the OTEC program, a company may apply to the Ministry for a preliminary non-binding determination on whether:

• its proposed business would be an eligible commercialization business
• a particular property is eligible intellectual property
• a particular entity is a qualifying institute.

The request can be made at any time before the end of the corporation’s first taxation year, and should be made using the form approved by the Minister of Research and Innovation. For further instructions, please see the OTEC Preliminary Determination Application Form.

Certificate of Eligibility: The Ministry will review a completed application together with all information furnished by the applicant to determine whether it meets all the criteria to obtain a Certificate of Eligibility.

Select the following links to download:

Program Fact Sheet

Information Guide

Preliminary Determination Application Form

Certificate of Eligibility Application (Word - 282KB, PDF - 54KB)

For further assistance regarding the Ontario Tax Exemption for Commercialization (OTEC), please contact the Ministry of Research and Innovation as follows.

Contact:

Ontario Tax Exemption for Commercialization (OTEC) Program
Outreach, Promotion and Business Development Branch
Ministry of Research and Innovation
18th Floor, 56 Wellesley St. W.
Toronto, ON  M7A 2E7
Tel: 416-327-6629
Email: otec_admin@ontario.ca